Doing Business in the Netherlands 2012 - American Chamber of ...

18.1.7 Non-Resident Shareholder Taxation
Doing Business in the Netherlands 2012
A non-resident entity which owns at least 5% of the issued share
capital in a Dutch company (defined as a “substantial shareholding” in
the CITA 1969) may be subject to 25% Dutch corporate income tax in
relation to profit distributions, capital gains and interest from loans in
connection with the substantial shareholding, as a non-resident
taxpayer. The substantial shareholding tax does not apply if the shares
can be attributed to a business enterprise of the non-resident
shareholder (“business enterprise relief”). 3
The government has proposed a new relief in addition to the business
enterprise relief. Under the proposal, the substantial shareholding tax
will apply only in cases which are considered artificial, i.e., in cases
that lack economic substance and in which the shareholder owns the
shareholding with the main purpose – or one of the main purposes – to
avoid Dutch personal income tax or Dutch dividend withholding tax. 4
Thus, even if the non-resident shareholder cannot attribute its
shareholding to any business enterprise, the non-resident taxation will
only apply in cases of tax avoidance.
18.2 Branches
Dutch branches of non-resident companies are regarded as nonresident
taxpayers for corporate income tax purposes.
18.2.1 Domestic Source Income
Non-resident taxpayers are subject to corporate income tax only on
their Dutch source income. Dutch source income mainly consists of:
3
On 30 September 2010, the European Committee has formally requested the
Netherlands to abolish this provision as it is considered to be in violation of
EU law on the freedom of movement/capital and of the Parent-Subsidiary
Directive.
4
Currently (October 2011) subject to approval by the Dutch Parliament and
Dutch Senate
Baker & McKenzie 167